During the course of trading on Tuesday of last week, the NASDAQ 100 touched the closing (though not the intraday) lows of February, before rebounding sharply. Simultaneously, the S&P 500 did a similar thing, only its stopping point was the higher lows of April.

It looks increasingly likely to me that this action is going to serve as the marker for a selling climax–the point where short-term speculators feel all hope of a rebound is lost and dump out their holdings in a final surge of selling with little regard for price–for the market downturn that began in October.

This positive sign for the market has been reinforced by the statements of influential Fed members that short-term interest rates are presently just below neutral, meaning that that body sees little need to continue to push them upward.

Barring any further damage to the economy from Mr. Trump’s bizarre tariff policies, it looks like we’ll enjoy enough market stability for us to return to the business of picking stocks.

It may be that the market downdrift we’ve been experiencing since early October started out as a bout of yearend mutual fund selling, as I’ve been writing for a while. Maybe not. In any event, the selling has continued for far longer than the mutual fund hypothesis can explain.

It may be that the market has been thinking that the prices of IT-related shares had gotten far too high, given their earnings prospects. Strike out the “far” and I’d have to agree; in my mind, the big issue preventing at least a temporary market rotation away from tech has been, and remains, what other group to rotate into.

It’s also possible that the operative comparison has been between stocks and bonds. The ongoing upward yield curve shift now has short-term Treasury notes yielding around 2.5% and the 10- and 30-year yielding above 3%. Arguably this is a level where income-hungry Baby Boomers could feel they should allocate somewhat away from stocks and into fixed income.

Whatever the market’s motivation, however, I’m sticking with my idea that the S&P bottomed on October 29th.

Many times, when the market has hit a low and has begun to rebound, it will reverse course to “test” the previous low. Also arguably, that’s what has been happening over the past week or so–formation of what technicians in their arcane lingo call a “double bottom.” The main worry with this idea is that two weeks after the initial low is an unusually short time for the double bottoming to be happening. Still, it’s my working hypothesis that this is, in fact, what’s going on.

The things to monitor are whether the market breaks below the late October low and, if so, whether it breaks below the April or February lows.

Another topic: oil. Crude oil and oil stock prices have been plunging recently. Most non-US producers added extra current output to offset the assumed negative impact of the US placing renewed sanctions on the purchase of oil from Iran. At the last minute, however, Washington granted exceptions to large purchasers of Iranian crude. Because of this, oil has continued to flow in addition to the extra oil from OPEC. Since demand for oil is relatively inflexible, even 1% – 2% changes in supply can cause huge changes in price. Whether or not the US deliberately set out to deceive OPEC and thereby cause the current oversupply, the price of oil is down sharply since the US acted.

Saudi Arabia and Russia have just announced supply cuts. Given that Feb – April is the weakest season of the year for oil demand, it’s not clear how long it will take for the reductions to lift the oil price. It seems to me, though, that the more important question is when rather than if. So I’ve begun to nibble at US shale oil producers that have been flattened since Washington’s action.